BBC News Online: North East Politics Show: Business Rates

Asking local businesses to vote to increase their rates is a bit like asking turkeys to vote for Christmas... yet that is what is happening in Newcastle.

Ok - it sounds like madness.

At a time when everybody is worried about the tax burden, Newcastle's Lib Dem council wants to persuade city centre traders to dig a little deeper into their pockets.

But the aim is to release extra funds to turn the city into a truly world-class venue.

It's the brain child of the City Centre Partnership (CCP), a company set up to improve the pulling power of the city and to make sure it matches the standards of other places like Manchester and Edinburgh.

CCP's director Sean Bullick explained that if plans get the go ahead, owners and managers of city centre stores will be asked to pay an extra 1% on their rates - but only those who have a rateable value of £10,000 or more.

So for example, if your business rates are £20,000 a year, you will pay an extra £200.

It is thought that the scheme will raise around £1.5m a year for the first 5 years.

The money would be ring fenced, and used to set up a Business Improvement District in the city centre - a scheme that is up and running in places like London, and credited with attracting extra shoppers into the city by offering a package of improvements.

So we could see things like investment in deep cleansing machines to get rid of chewing gum on pavements, and street wardens who would act as meters and greeters to tourists.

Investments in marketing and better signs might also be included

There is an emphasis on buying-in extra security as well. The CCP says that although Newcastle is one of the safest cities in the UK, there is still a perception that it is not - particularly at night.

The draft proposal was only sent to businesses this week, but already it seems to have gathered momentum and support.

Big firms like John Lewis, Fenwicks and even Newcastle United, have all said they intend to back the scheme.

But not everyone thinks the idea is a good one.

The Tax Payers Alliance believes inviting businesses to pay higher rates will only lead to businesses retreating from the centre.

It says, "When businesses desert an area, the quality of that area rapidly declines as unemployment increases, shop fronts get boarded up etc.

"Therefore, we need to revisit the policy of the 1980s of enterprise zones, where areas which needed development/regeneration had zero business rates for a period, attracting new businesses, smarter buildings, and more employment.

"In sum, raising taxes drives out businesses and depresses areas."

Opposite effect

But the CCP and Newcastle city council say it will have the opposite effect.

They believe new leisure and retail businesses will be more likely to come to a city that has so many extra benefits, above and beyond those provided by the council through taxes.

Businesses are currently being asked to give their feedback on the idea.

It is thought that a vote to decide whether it should take place or not will happen in October - with other cities likely to follow Newcastle's lead.

The Politics Show on Sunday 11 May at 1200 BST